Travelport broke the news in a Securities and Exchange Commission filing, explaining that United notified Travelport Dec. 16 that the airline intends to terminate their contract for Apollo reservations-system services on March 1, 2012. The contract was due to expire in 2013.
Travelport said it expects United, which merged with Continental on Oct. 1, will consolidate its internal reservations system within the system that Continental uses.
Continental currently uses the HP SHARES reservations system.
However, United informed employees of the decision in an internal bulletin Dec. 21.
United told employees it will use SHARES for “reservation, check-in and e-Commerce.”
United also stated it will use United systems for flight operations, Continental systems for crew management, Orion, ARORA and SDO from United for revenue management and network operations, and a cargo vendor is still under review.
The airline said it based its technology systems decisions based on whether the vendor provides the best customer and employee experience and facilitates growth of the combined airline; whether the system is cost-effective and allows easy migration; and whether the system can be easily enhanced and accommodate changes to United’s business model.
Rashaan Johnson, a United spokesman, confirmed that the airline evaluated Apollo, SHARES and “several other options” and chose HP SHARES as the best customer and employee alternative and because its ability to handle a migration “in a reasonable amount of time.”
In the days when airlines commonly owned reservations systems and GDSs — then known as Computerized Reservations Systems or CRSs — United created the Apollo Reservations System in 1971.
The decision is a big win for HP, which provides reservations systems for numerous carriers and has a contract to build a new reservations system for American Airlines. American calls the new res system Jetstream and HP is marketing its next-generation res system as HP Agilaire Passenger Service Solution to other airlines.
United’s decision to transition to HP is a significant blow to both Travelport and Amadeus.
“It is expected that once United fully transitions off the Apollo system, which would be during the 2012 fiscal year at the earliest, it may adversely affect our results of operations due to the loss of fees resulting from this agreement, unless such revenue can be regained through the sale of other services to United or other carriers,” Travelport said.
Travelport said it expects to feel the financial impact of United’s decision in 2012 at the earliest.
United is among Travelport’s largest customers in North America and as late as April 2010, Travelport was stating publicly that it didn’t expect United to transition to a different reservations system.
United’s decision to transition its internal reservations system to HP could conceivably lead to a legal wrangle with Amadeus.
Amadeus is taking the stance that its reservations system contract with United remains in effect.
United would be HP’s largest airline customer and would be able to have considerable influence into improvements in the SHARES system and the development direction of the Agilaire system, Harteveldt says.
Even before HP acquired EDS, which operated the SHARES system, EDS had been making system improvements, he adds.
Harteveldt considers United’s decision an interim step as it works to get through the merger.
“I think this is step 1 of a multi-step process,” Harteveldt says. “This is an interim solution. I don’t think in five or six years this is where we will see United Airlines.”
In other words, Harteveldt argues that in the future the merged United Airlines, with Continental in the fold, will reassess its overall technology needs and decide whether it would remain with HP.